Mayor Jackson's Neighborhood Transformation Initiative brings development and gentrification concerns

Posted at 10:45 AM, Feb 13, 2020
and last updated 2020-02-13 18:17:52-05

CLEVELAND — While Mayor Frank Jackson's Neighborhood Transformation Initiative is bringing new development and investment into neighborhoods that need the help, it's also making some people who live near the new development concerned about property values and property taxes.

The Neighborhood Transformation Initiative is a $65 million program that includes $25 million in public investment and $40 million in private capital coming from various financial institutions, with the goal of sparking new projects where developers might not otherwise work.

New homes being built in Circle North and other places near Glenville will be "rent-to-own," giving rentors an option to buy their home after a certain time period, helping them build equity even as they rent.

Some of that new construction is just down the street from Rita Knight-Gray, who grew up in the home she now owns in the Circle North community, north of University Circle, south of Glenville, and east of Hough.

She remembers the days before the nearby Hough Riots when her neighborhood was so tight knit that neighbors would keep an eye on children who lived nearby, and told parents when students were cutting class.

This empty plot near Knight-Gray's home used to have four houses on it, showing how physically and metaphorically close her community was when she was growing up.

"People were looking out for each other and it was the best place to grow up," said Knight-Gray.

Now, many of the plots those neighbors lived on are vacant. Homes under construction down the street are the latest in a series of revitalization attempts Knight-Gray has witnessed over the years.

Rita admits new construction on vacant lots would be helpful, but she's concerned about the impact it will have on the people who live near by who might not be able to pay higher property taxes when their property value increases.

Knight-Gray says she isn't against new development, and admits that filling in vacant land could make the community as bustling as it once was, but she's also worried that it could make it too expensive for people like her, on fixed incomes, to stay.

"It's going to raise the assessed value of their property to a level where they'll be paying taxes that they can't afford," said Knight-Gray.

It's happened before.

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Residents on Clevland's west side talk to News 5 about their increased property taxes because of rising property values in 2018.

On the west side, residents living in Cleveland's Detroit-Shoreway neighborhood, and with the Tremont Lincoln Heights Block Club, contacted News 5 after they received home reappraisal increases of 50 to 400 percent.

Knight-Gray says she wouldn't be able to afford that kind of increase.

Rita says after paying off loans she took out to help fix up her house and other expenses, there isn't much of her fixed-income left over to absorb a big increase in property taxes.

"The gentrification they are talking about is real," said Famicos Foundation Executive Director John Anoliefo, referring to Knight-Gray's concerns. "It's a bad word, but there are also benefits that come with what we're trying to do in the neighborhood.

The Famicos Foundation is one of the organizations looking to spark development around Knight-Gray's community, while also trying to improve quality of life in Greater Cleveland through revitalization, affordable housing and social services.

Apartment units show the Circle North branding, which Rita says is the most recent way Cleveland has started to refer to her neighborhood, which is sandwiched between Hough, Glenville, and University Circle.

Anoliefo says in situations like this, it's hard to avoid gentrification. He says Circle North is a good community to start revitalizing because it is slightly healthier than the surrounding neighborhoods, and success in Circle North could spill over into other communities.

"That is a way to tell people, 'This is a place to move in. This is a place that has transformed itself," said Anoliefo.

Anoliefo says success in Circle North could spill into neighboring communities, helping to lift up the entire corner of northeast Cleveland.

Anoliefo says the city and organizations like his are trying to help. He says part of the work being done in Circle North will rehab vacant homes, help homeowners fix up homes they already live in, while also building new homes.

The City of Cleveland told News 5 in an email:

The City of Cleveland does not control property taxes. We are investing in these communities to stabilize them and prevent further decline. Doing so, naturally results in an increase in market values. However, we are working with people who qualify to minimize the impact of any tax increases through the tax, water and sewer homestead programs.
Mayor Jackson's Office

Those Homested Programs take "the form of a credit on property tax bills, allowing qualifying homeowners to exempt up to $25,000 of the market value of their homes from all local property taxes. For example, through the homestead exemption, a home with a market value of $100,000 is billed as if it is worth $75,000," according to the Ohio Department of Taxation.

It would be a start, but Knight-Gray says it may not be enough.

"Getting a discount when your taxes have been raised 500 percent does not help," said Knight-Gray.